Churches elect or assign members to serve on a Finance Committee of the church.

This team of people is responsible for the management and stewardship of church
funds.

This is an important committee because it can influence sustained financial health

and growth of church assets. When mismanaged, this group can negatively affect the
long-term financial viability of a church. Something no one wants to be responsible
for.

Church Finance Committee

Duties and responsibilities
1. Revenue Projections

It is difficult to budget without having a realistic idea of how much money will be
available. Take a realistic approach to projecting revenues by analyzing historical
giving, attendance patterns and average member donations.

Err on the side of caution and base projections on real giving patterns rather than
hopeful increases. For instance, if your church is in the middle of a capital campaign,
do not assume weekly giving toward the general fund will increase when members
are stretching to designate funds to a building project.

2. Budgeting Process

The budget committee establishes the global budget based on revenue projections
and allocates pesos to individual departments/ministry.

The individual ministry leaders are responsible for creating their own budget
estimates based on church strategy, goals and allocated resources.

Allowing individual ministry leaders to prepare their own budget estimates makes
them more accountable, accurate, and reliable.

The advantage to this approach is working leaders are more apt to follow their own
budgets because they participated in the budget process and understand the
reasoning behind it as opposed to a budget handed down to them from above.
This adds a layer of accountability in that the leader has no one else to blame for
failing to meet their own budget requirements.

3. Budget Review

A budget is simply an itemized allotment of funds and require monitoring. This

committee should be monitoring the budget every month and reviewing the actual
pesos that came in, the actual pesos that went out and analyzing any variances.

Sometimes there needs to be adjustments made mid-year to the budget when

projections fall short or unexpected expenses come up.

4. Emergency Funding

Even the best of budget planning and go awry, when an unexpected major expense
arises. To offset this, allocate a percentage of budget pesos to emergency funding.
Keep this fund growing year after year so those unanticipated emergencies can be
managed without impacting the rest of the budget.

5. Financial Reporting

Systematic reporting helps the church see how it is performing financially. Create
monthly or quarterly reports and keep church leadership apprised of spending and
budget variances. If there is an effort to raise building funds show pesos that are
available for the project and what percentage of funds have been raised.

If there is a focus to pay down church debt, report on that also.

6. Good Stewardship

Churches rely on the generous donations of its members to do what they do. Being
good stewards of those funds is a basic responsibility of the church board and finance
committee. This team of people should challenge any spending that does not support
the church mission, vision or strategy.

7. Safeguarding Church Assets

The board along with the finance committee are responsible for ensuring that there
are good financial controls with church assets. This committee should be writing cash
handling policies and auditing the process of anyone who handles church money.

This includes ensuring there are safe places to store cash, that no one is ever alone
with money and that there is constant supervision of members, volunteers or
employees who come in contact with cash. If you think embezzlement in the church
is not common, think again.

8. Ensuring Profit Margin

Profit margins are how nonprofit organizations grow their capital. Since nonprofit
organizations can’t take profits out of the organization, they invest any peso that are
above expenses back into the organization.

For instance, if a church that brings in P500,000 budgets for a 5% profit margin, they
will be saving P25,000 a year that can be reinvested into church facilities. All church
budgets should include a percentage that is designated as a profit margin.

9. Debt Management

It is difficult to get a church up and running without racking up some debt. However,
a church is limited in what it can do if it is debt-ridden. The finance committee should
have a strategy for paying down debt and that should be part of the budget.

Paying down debt can come through capital campaigns that are designated for debit
reduction or it can be from aggressive debt payments.

Either approach is fine but the goal should be to get the church as close to debt free
as possible.

10. Member Financial Teaching

Church members are only as giving as their personal finances allow. The finance
committee can influence members by offering teaching in personal finance,
budgeting and common sense to finances.

Help members get a handle on their own personal finances and giving will inevitably
increase.

11. Manager Budget Training

Churches that employ people to manage various departments/ministry within the

church should use the finance committee to help train church leaders on how to
manage their budget, how to read and interpret financial reporting statements and
how to address departmental/ministry budget variances. This committee should
develop this training and create a simple process to help managers become financially
literate.

A church finance committee is the financial think-tank for a church. Develop a finance
committee that is committed to budgeting, monitoring and controlling how church
funds are spent and your church will have the necessary resources to fulfill its mission,
vision and strategy.